Three people have sued Skrewball Spirits claiming they have an ownership stake in the growing company
Exuding the bohemian irreverence of its Ocean Beach roots, Skrewball Peanut Butter Whiskey comes with its own warning: “a night with Skrewball is bound to get a little nutty.”
The same could be said for the legal battle being waged over ownership of the locally crafted spirit.
Created by husband-and-wife team Steve and Brittany Yeng, Skrewball is based on a signature peanut butter-and-whiskey shot that Steve concocted after opening his first restaurant, OB Noodle House. The shot was so popular that the couple decided to bottle it.
But three people — including former Major League Baseball All-Star pitcher David “Boomer” Wells and local television host Noah Tafolla — have filed lawsuits in San Diego Superior Court alleging they were all promised a stake in the venture. The Yengs, in turn, have filed a cross-complaint of their own against Tafolla, calling him a “parasitic individual” who exploited his relationship with the couple to enrich himself.
The legal quagmire comes as Skrewball expands distribution nationwide with the goal of convincing the American spirits market that peanut butter and whiskey really do go together.
The Yengs have already wooed some connoisseurs. Shortly after its debut last year, Skrewball won the Double Gold in the flavored whiskey category at the 2018 and 2019 New York World Wine & Spirits Competition and was named a Gold Medal Whiskey at the 2019 Los Angeles International Spirits Competition.
“We think it’s going to have a big potential to be a $1 billion company in about four or five years from now,” Steve Yeng told the Union-Tribune in an interview last year.
Taste of freedom
The first time Yeng tasted peanut butter was as a newly arrived child refugee.
He and his family had escaped from the brutal Khmer Rouge regime in Cambodia when Yeng was about a year old, after he contracted polio. They lived in a refugee camp in Thailand for five years before being sponsored by an Obecian family.
“You went from hell and landed in most wonderful place in world,” Yeng recalled to the Union-Tribune of his new home.
Yeng, his parents and siblings slept on mattresses in an Ocean Beach garage and ate from food baskets donated by a local church. A staple was peanut butter-and-jelly sandwiches on wheat bread.
“The first time I tasted it I was like, ‘Holy crap, what is this?’” Yeng remembered. “It’s the most amazing thing I’ve ever had.”
In a video discussing the origins of Skrewball, Yeng referred to peanut butter as “the taste of freedom for me.”
His parents, butchers in Cambodia, worked at O.B. Donuts and eventually bought the place. The shop served as Yeng’s de-facto business school. In 2008 — still one class away from graduating from UC San Diego — Yeng opened his own restaurant, OB Noodle House. Two other Ocean Beach venues followed: OB Noodle House Bar 1502 and The Holding Company.
Behind the bar, Yeng reached back to his childhood, combining his old favorite ingredient with whiskey for a creamy signature shot. Mixing the cocktail with oily, goopy peanut butter was a messy task, and the couple soon learned that the recipe would have to be significantly altered to be shelf-stable for mass production.
The Yengs met as children and began dating in high school. Now they were spouses and business partners. Brittany, who has a masters in chemistry and a law degree, turned her focus entirely on Skrewball.
The result was 70-proof whiskey with natural peanut butter flavor. It is distilled in San Marcos and bottled in Mira Loma.
It is marketed it as a spirit for misfits and outcasts — hence the black sheep logo — reflecting the characters drawn to Ocean Beach.
Tafolla was the first to sue.
The longtime Ocean Beach resident is known for hosting “Wonderland,” a television show that highlights local businesses and attractions.
He was filming a segment for “Dining Out with Noah” in 2017 at Bar 1502 when Steve Yeng asked Tafolla to partner with him and his wife to bring Skrewball to market, according to the lawsuit, which was first reported by SanDiegoVille.com. Two months later, the Yengs created Skrewball Spirits as a limited liability corporation.
The Yengs were interested in Tafolla’s industry and celebrity contacts, including former Padres pitcher Wells, according to the lawsuit. There were several meetings, and Yeng eventually promised Tafolla and Wells 4 percent ownership of the company each in an apparent handshake deal, the suit alleges.
According to the lawsuit, the partnership was confirmed through a text Yeng sent to the men: “Gentlemen, thank you for your time. I’m super excited for both of you guys to be on board. We are the Skrewball.”
Tafolla claims he worked for the next year and a half on the brand at the Yengs’ request, including meeting with industry contacts, promoting the liquor and obtaining photographs of celebrities drinking or posing with Skrewball, including NBA stars Stephen Curry and Charles Barkley, actor Jimmy Fallon and castmembers from “Saturday Night Live.”
Tafolla said Yeng grew evasive around the end of 2018 about plans to move forward with the company. By early 2019, Tafolla was shut out completely, with Brittany Yeng proclaiming in her view “there was never an agreement” giving Tafolla or Wells a combined 8 percent share, according to the suit, filed in March.
The Yengs struck back with a cross-complaint in June, accusing Tafolla of misrepresenting himself as a potential investor and then enriching himself at the Yengs’ expense.
The lawsuit claims Tafolla did not have sufficient funds to invest the $200,000 that had been discussed, and even tried to sell a portion of his purported ownership investment so he could raise the funds to actually invest. The Yengs further accuse Tafolla of taking cases of Skrewball to stock his own events and using their industry cache to advance his own interests.
As for the photo-ops, they “were of no value to Skrewball Spirits as none of these celebrities provided consent for their pictures to be used,” the cross-compliant states.
Tafolla’s attorney has declined to comment on the litigation.
Wells followed up with his own lawsuit in May.
The San Diego native graduated from Point Loma High School, same as Tafolla and the Yengs. The left-hander is perhaps best known for pitching a perfect game in 1998 for the New York Yankees — only the 15th such occurrence in baseball history at the time.
Wells claims he paid the Yengs $140,000 for a 6 percent ownership stake in Skrewball Spirits. The Yengs were supposed to draw up a formal agreement, the lawsuit states, although it is unclear if one was ever signed. The lawsuit refers to the same text message sent to Tafolla as written confirmation of the agreement.
The lawsuit states Wells has since devoted substantial time and resources to promoting the whiskey, including holding meetings about distribution to Canada and Japan, as well as providing input regarding product design, packaging and marketing.
One Twitter post shows Wells drinking Skrewball with former NFL players Brian Urlacher and Jared Allen, claiming the whiskey is “coming to a bar near you soon.”
Wells’ attorneys did not respond to requests for comment.
The sake idea
The third lawsuit came from entrepreneur Adam Purcell.
“He met Mr. Yeng and ironically the two of them bonded over both being screwed over by business partners in the past,” one of Purcell’s attorneys, Kenneth Fitzgerald, said in an interview.
Purcell and Steve Yeng had entered into a 50-50 partnership in 2015 to develop and distribute a line of infused sake products “as well as other liquor products,” according to the lawsuit and attached agreement. But the duo determined they couldn’t feasibly distribute the sake across state lines under liquor laws.
The discussions then turned to bottling a peanut butter whiskey in 2017, according to the lawsuit. They went so far as to meet with licensing attorneys to further explore the venture.
But Yeng told Purcell to hold off that summer because his wife was having a baby, the lawsuit states.
“Unbeknownst to plaintiff, however, Steve Yeng was secretly developing the peanut butter whiskey business without him,” the suit claims.
Purcell blames Brittany Yeng in part for cutting him out, alleging her conduct was “fraudulent, intentional, oppressive and done with malice, thus entitling plaintiff to an award of punitive damages.”
On the other hand, the Yengs’ attorneys argue in court documents that Steve Yeng never signed the partnership agreement, calling the signature a forgery.
Later, the two signed a licensing agreement that specifies a sake and tequila brand, not peanut butter whiskey. The Yengs upheld all obligations as to the licensing agreement, their attorneys argue, including reimbursing Purcell for some start-up costs of the failed sake idea.
Both sides dispute which is the operating and valid agreement. The questioned partnership agreement does not include an arbitration clause, while the licensing agreement does.
In fact, the matter had been sent to arbitration when Purcell, who now owns an East Coast-based printing company, filed the lawsuit. The Yengs are asking the judge to order the case back to arbitration.
“I think Mr. Yeng and his wife decided to go off on their own without honoring the promise made by Mr. Yeng,” Fitzgerald said. “I’m confident once all the facts and evidence come out, my client will be entitled to rightfully share the profits on that venture.”
The three lawsuits and cross-complaint are currently in front of three separate judges. The Wells and Tafolla cases have been set for separate trials next year.
“We look forward to resolving the matter through the judicial process, during which we will vigorously defend the company and its founders against these allegations,” a representative of Skrewball Spirits said in a statement.
Meanwhile, Skrewball continues its expansion. It’s now available in 46 states at major retailers — such as Walmart, Target and BevMo! — as well as restaurant chains including Applebee’s and Buffalo Wild Wings, according to the company.
Yeng has also decided to divest all his interests in the restaurants he launched to focus on Skrewball — described as a self-funded entity, the company said.